PayPal is making a push into the creator economy with the launch of PayPal Links, a new feature that integrates with Canva and allows users to design content and accept payments in one place.

The move targets a persistent friction point for creators: getting paid. Many still spend significant time and money building standalone websites or storefronts just to process transactions.

By embedding payments into Canva’s design tools, PayPal is aiming to remove that barrier. The integration will give Canva’s 265 million monthly global users the ability to create, share, and monetize content without leaving the platform.

“This is a home run for PayPal,” said Don Apgar, Director of Merchant Payments at Javelin Strategy & Research. “What they’ve done with Canva is a great example of the power of embedded payments and shines a bright light on the path to growth that all successful payments companies are following.”

The Growth Opportunity

This growth opportunity has attracted many leading payments firms to build infrastructure for the gig and creator economies. For example, PayPal recently introduced functionality allowing YouTube creators to receive payouts in its PYUSD stablecoin, which marked both a milestone for digital assets and a win for the company.

These partnerships also reflect a broader trend—the convergence of e-commerce and social media into social commerce. TikTok Shop has emerged as a pioneer in this space, largely due to its ability to integrate influencer demos and product videos with payments, creating an end-to-end user experience.

Ditching the Website

This convergence shows no sign of slowing. According to Statista, global social commerce sales are projected to surpass $1 trillion by 2028. This surging market makes it increasingly imperative for creators to embed payments into their content.

While e-commerce may be the primary focus of PayPal’s’ Canva integration, the company notes that PayPal Links also enables creators to bypass the need for a standalone website altogether. Creators can embed payment links, QR codes, and PayPal checkout functionality directly into their Canva designs, allowing them to accept payments via social media, email, or even in person.

This optionality—along with increased support for payment types—should be a welcome addition for creators who often struggle to meet consumers’ high expectations around payments.

The post PayPal Gives Canva Creators a Unified Solution for Payments appeared first on PaymentsJournal.

Embedded finance, embedded commerce, and integrated payments are different names for the same shift: integrating payments and financial services into your platform to deliver more value to customers and unlock recurring revenue streams. As Independent Software Vendors (ISVs) position themselves for success in a crowded and dynamic marketplace, building a comprehensive embedded commerce strategy is key to scaling your distribution channels and maximizing revenue potential.

Regardless of terminology, embedded payments offer added value to customers, strengthen long‑term relationships, and provide a more holistic solution. According to Future Market Insights, the embedded finance sector will grow from USD 85.8 billion in 2026 to USD 370.9 billion by 2036, representing a 15.8% compound annual growth rate (CAGR) as expanding embedded finance use cases accelerate adoption.

From integrated payments to financing solutions, many ISVs need a strategic plan to incorporate the functionality that makes sense for its vertical and customer base. Let’s take a closer look at how implementing the right strategy can differentiate ISVs from the competition.

Growing Your Distribution Footprint with a Vertical Partner Approach

We’ve all heard the expression, “A jack of all trades, master of none.”  That sentiment underscores an important reality for businesses competing in increasingly complex industries. Taking a vertical or vertical-adjacent approach to capturing market share creates a compelling value proposition for businesses looking for solutions that solve specific challenges, industry regulations, and operational inefficiencies.

Healthcare provides a clear example. While EHR vendors have saturated the market with electronic health record functionality, providers still struggle to manage data across EHRs, payers, labs, devices, and applications. For ISVs, this fragmentation creates an opportunity.

ISVs that embed healthcare payments functionality directly into EHR workflows—automating accounts receivable, enabling digital and text-based payment options, and improving revenue cycle management—can address persistent financial and operational gaps. By extending beyond record-keeping into the entire payments lifecycle, these platforms can differentiate in a crowded healthcare IT market while delivering measurable value to providers.

For many software companies, partnerships offer a practical path to navigating the complexity of the healthcare ecosystem. By focusing on core competencies while integrating complementary healthcare or payments technology, companies can reduce development timelines and accelerate speed to market. A partnership model also creates mutual value, enabling both organizations to benefit from shared roadmap innovation, referral partner programs, and expanded sales distribution channels.

Whether it’s access to embedded healthcare payments, flexible point‑of‑sale financing, or text-to-pay functionality that helps providers manage their businesses more effectively, embedded solutions create a stickier footprint while generating incremental revenue. Success depends on partnering with a provider that offers the infrastructure to scale alongside your business—while remaining flexible enough to adapt as market needs evolve.

U.S. Bank | Elavon – Smarter Payments That Move Your Business Forward

Backed by the strength and stability of U.S. Bank, Elavon delivers the best of both worlds: the financial services infrastructure of one of the nation’s most established banks, combined with the agility required to compete in a fast‑moving software and payments landscape. With hundreds of integration points, partner programs designed to support growth at every stage, and deep vertical expertise, Elavon offers a payments journey tailored to your business. Connect with us to learn more.

The post Embedding Payments for Growth: How ISVs Can Scale Through Vertical Focus and Partnerships appeared first on PaymentsJournal.

Over a quarter of the U.S. workforce now participates in the gig economy in some capacity. As these platforms have grown, payouts have become a central operational concern: timely, reliable payments are essential to attracting and retaining freelancers and gig workers.

The Philippines is experiencing a similar shift, with nearly a quarter of employed workers engaged in gig work. Unlike their U.S. counterparts, however, many Filipino freelancers work on projects for foreign clients.

That dynamic has created a pain point. Cross-border payouts are often slowed by intermediary banks, weighed down by transfer fees, and subject to foreign exchange costs. Payments can take days to settle and may shrink by as much as 10% by the time they reach the recipient.

These frictions are pushing many gig workers in the Philippines toward stablecoin payouts. Stablecoins like USDC and USDT can settle in seconds, whether the transaction is domestic or international. Since they are pegged to the U.S. dollar, recipients can avoid immediate currency conversions, and blockchain-based transfers bypass many of the fees embedded in the traditional correspondent bank model.

Ramping Up the Comfort Level

While some companies have hesitated to add stablecoins to their payment repertoire due to regulatory uncertainty, those concerns have begun to ease. The implementation of the EU’s Markets in Crypto-Assets (MiCA) framework and the proposed GENIUS Act in the U.S. have helped ramp up global comfort with regulated stablecoin usage.

User expectations are another powerful driver. As consumer payments move closer to real-time settlement, that expectation is bleeding into commercial payments and platform payouts.

Unlocking the Digital Economy

Stablecoins are well positioned to meet these demands across a range of use cases. Payouts in particular—whether marketplaces paying sellers, gaming platforms issuing winnings, or YouTube paying its creators—represents a strong fit.

In countries such as the Philippines, where a growing share of the workforce is reliant on cross-border income, stablecoins are about more than speed and lower fees. For many workers, they offer a direct on-ramp to the global digital economy.

The post Stablecoins Power Philippines’ Thriving Gig Economy appeared first on PaymentsJournal.

Every year, billions of dollars vanish at the final step of online shopping, not because consumers change their minds, but because of hurdles within the checkout experience. Despite decades of innovation in payments technology, many shoppers still walk away when checkout feels slow or overly complex, costing businesses an estimated $260 billion annually.

The answer may lie in the growing influence of developers as companies build embedded payment platforms. In a PaymentsJournal Podcast, Bryan Long, Senior Director of Product Management at North, and Don Apgar, Director of Merchant Payments at Javelin Strategy & Research, discussed how developers are driving innovation—and actively solving checkout challenges—for online retailers.

Managing Friction

Today’s e-commerce ecosystem reveals a widening gap between shoppers and merchants. Consumers expect a seamless experience: fast product discovery, strong brand trust, and checkout convenience features like one-click checkout, intelligent form filling, and address autocomplete. Meanwhile, merchants and the independent software vendors (ISVs) that power point-of-sale systems need data access and security, without sacrificing conversation rates.

“Address autocomplete or one-click payment buttons are not just conveniences for merchants,” said Long. “I think of them as friction management. Every extra field that a user has to fill out lowers conversion and results in decreased sales.”

Some platforms attempt to bridge this gap with guest checkout solutions. Shopify, for example, allows customers to complete purchases in a single click using stored credentials. While convenient, this approach can limit a retailer’s ability to collect customer data such as email addresses and shipping details.

Additionally, redirecting shoppers to a third-party payment gateway—often with a different URL—can undermine brand trust and introduce friction at the most critical moment of the purchase journey.

“For me, it sets off all these subconscious alarm bells. Is data security an issue here? It feels like the page has been taken over by hackers,” Long said. “As a product person, it’s really bad product design especially when a shopper is about to divulge their most personal data.”

The Benefits of Embedded Payments

Embedded payments provide a more comprehensive solution. They allow businesses to own the checkout experience, keeping customers on the merchant’s site through the transaction while delivering a fully branded, customizable flow. The result is lower churn, higher conversion rates, and increased revenue.

By enabling one-click checkout and supporting popular wallets like Apple Pay and Google Pay, embedded payments reduce cart abandonment. Features such as address autocomplete and intuitive form design further streamline data entry, cutting down checkout time and customer frustration.

“The tech has evolved so much just in the last couple of years to meet all those points that reduce the friction, protect the data, and deliver that stellar user experience,” said Apgar. “But the fact of the matter is most merchants, when they spool up their e-commerce site and pick a payments provider, they implement the tech that’s available and never revisit it. Many sites are using outdated technology simply because that was the best that they could find at the time.”

As cart abandonment rates remain stubbornly high, businesses are reevaluating legacy payment processors and increasingly opting for fintech-driven solutions. While switching costs exist, many organizations are finding the integration effort well worth the payoff.

Developers as Decision Makers

Over the past five to seven years, another major shift has reshaped the payments landscape: developers have become key decision makers. If a product introduces too much friction—whether in APIs, documentations, or integration complexity—developers will simply abandon it and advise business owners to do the same.

“What we’re really seeing is developers having become first-class citizens,” Long said. “It’s an add-on, self-service for developers is sales. In 2026, a salesperson is often times not your first point of contact—the API documentation is.”

“That’s why we build product functionality for developers,” he said. “Providing a unified sandbox that mirrors production allows developers to test end-to-end in system integration without having to wait for a sales call. Giving developers access to API logs and code samples also improves the integration experience and cuts down on the time to integrate, which is faster speed to revenue.”

When embedded payment strategies are paired with well-architected, API-first platforms, partner integration timelines can shrink from months to weeks. This cycle builds trust with developers and improves brand credibility. At the end of the day, developer experience is not just about having polished documentation—it’s a revenue engine.

“I’m seeing more specific solutions as opposed to just building a SaaS product for one industry now,” said Long. “It’s getting more verticalized and specific to merchants, individual use cases and needs. Finding a solution to help drive your business is becoming easier, and that’s all due to the rise of the developer as a decision maker.”

The Rise of Agentic Commerce

That focus on developer experience is now colliding with an even bigger shift—software is no longer built solely for humans to operate. Increasingly, it’s being built for other software to reason over, act on, and transact with autonomously. As AI systems move from passive tools to active decision-makers, the same API-first principles that won over developers are becoming foundational for a new class of users—AI agents.

One of the most transformative trends in payments today is agentic commerce, where AI agents handle every stage of the transaction. Research suggests that within the next few years, more digital commerce transactions will be initiated by AI bots rather than humans.

This shift makes API-first embedded payments not just an advantage, but a requirement for survival. In an agentic commerce environment, checkout flows must be readable and executable by machines, not just optimized for human users. Merchants must deliver streamlined experiences while also ensuring their systems are discoverable, secure, and transactable by AI.

“It’s a complex landscape and it’s getting more complex as the tech advances,” Apgar said. “Merchants really need to find a payments partner with a strong catalog of payment options that’s well organized and deliverable in a seamless fashion. The developer is now a first-class citizen, not a support ticket.”

Long added: “In the end, payments should not just be thought of as a destination that the customer travels to. It should be a seamless layer of the experience that the shopper is having. So whether the shopper is a person on the web or it’s an AI agent in the cloud, the goal is still the same, which is zero friction between purchase intent and ownership.”

The post How Developers Are Driving the Future of Embedded Payments appeared first on PaymentsJournal.

Almost without notice, disappearing payments have shifted from novelty to expectation in small business transactions. A traveler arrives at an airport, books a rideshare, and checks into a hotel—never pulling out a wallet or handing over a card. The transaction happens seamlessly, almost invisibly.

The same technology fueling consumer-facing apps is now within reach for small businesses. Research from Worldpay shows that 90% of small businesses consider embedded finance—the integration of financial services, including payments, directly into non-financial offerings—essential to their growth. In a PaymentsJournal podcast, Matt Downs, Group President of Worldpay for Platforms, and Christopher Miller, Lead Analyst of Emerging Payments at Javelin Strategy & Research, discussed how technological advances are making small business payments both more sophisticated and less visible at the same time.

“Why are payments disappearing?” asked Downs. “Because consumers want ease. They don’t want to see the friction.”

The Sweet Spot

While they may see the benefit of disappearing payments, a small business faces a different reality than an independent contractor driving for a rideshare company. For small businesses, payments cannot simply vanish into the background. They need visibility and control—both to verify that transactions have been completed and to manage cash flow. Likewise, consumers may prefer that payments remain somewhat visible when dealing with small businesses, so they can make more informed choices based on factors like price or payment size. 

The sweet spot is a system where consumer can choose to dip, chip, or use a digital wallet—without having to rethink that decision every time they pay a small business. For the business, it means having access to a payment process that feels sophisticated yet intuitive, flexible yet low-effort to manage. 

“Building a solution that supports all of those elements is very challenging,” said Miller. “You have to be able to support all the way through the design elements and what the interface looks like, all the way back to the seamless handling of the payment processing itself.”

Integrating into New Verticals

The concept of delivering targeted lending within verticals is not new, but it has not yet been fully woven into the consumer experience. For example, a veterinary office may have offered a financing plan in the past, but it likely wasn’t something a customer could access through the same website where they booked their appointment. For the doctor, providing a lending product with fast approval that integrates directly into their existing systems can become a meaningful competitive advantage.

“If you are a vet, the last thing you want to do is evaluate a bunch of different lending programs and take seven sales calls from seven lending programs to evaluate the right one who can integrate the lending product directly to the patient experience,” said Miller. “The market is looking for a solution that meets the needs with a minimum of risk.”

The beauty of a vertical solution is that it is tailored to a business’ individual needs—whether that business is a veterinary practice, a restaurant, or a dry cleaner. To be effective, the software provider must understand the workflow, revenue streams, and nuances of the business, no matter how niche.

Payments have evolved not only by becoming more complex, with more options for both payers and payees, but also by becoming increasingly specialized for the unique requirements of each business type.

“That’s a whole new spin on finance,” said Downs. “Fifteen years ago, there were pretty good payment options out there for retail and restaurants, although they were pretty expensive until the cloud drove the cost down. But that also allowed more entrants to come in and say, ‘Hey, I want to solve use cases for veterinarians or food pop-up trucks.’”

The specialization adds complexity to the process, making an embedded payment solution more of a necessity.

“In an ever-evolving landscape of payment acceptance options, the number of merchants who are actually able to manage that on their own and make decisions to add or not add or build in the integrations is vanishingly small,” said Miller. “The idea that a platform is better situated to manage that complexity and that change is kind of a slam dunk.”

Building Through AI

Artificial intelligence is an important component of these new platforms. It helps companies better understand their customers’ needs and plays a key role in driving technological development.

“It allows room for new entrants to come in and shake up weak software companies that weren’t good at understanding their customers at their core,” said Downs. “It’s going to challenge them. It’s going to have an effect on who the winners and losers are in this space. But in the end, the small businesses and consumers will win because they’re going to get better served.”

Embedding AI directly into products gives merchants access to the insights that can transform a business. While AI requires large amounts of data, integrating it into a platform allows businesses with limited data to benefit from powerful analytics. For example, a small vet clinic may not have enough payment data on its own clients to accurately assess risk profiles—but AI can change that.

While small businesses aspire to be sophisticated payment processers, they also don’t want a separate piece of software for the front office, another for the back office, a standalone banking suite, and so on. This has given rise to the notion of the “everything platform,”—software designed to help companies meet all of their processing needs in one place.

With advancements in AI and technologies that can connect and integrate multiple platforms, the ecosystem is now ripe for embedded payments to support small businesses. Very few merchants are capable of managing their payments independently while deciding which integrations to adopt. Embedded payments allow their processes to remain not only customized but also state-of-the-art.

“We take the heavy lifting, the operations, the payments, the financial underwriting, liability, everything that comes with adding more on,” said Downs. “We take that off the software company with a goal of just making sure it works for businesses and the consumer.”

The post The Invisible Checkout: Embedded Payments Transform Small Business appeared first on PaymentsJournal.

Independent Software Vendors (ISVs) and SaaS providers have long viewed healthcare as a rich target for vertical expansion. The market is large, highly regulated, and plagued with inefficiency. Many vendors break into this space by solving one part of the revenue cycle process, such as eligibility checks, claims scrubbing, or denial management. That narrow focus gets them in the door, but it omits the element that connects the cycle from end to end—payments.

Payments are more than a single transaction. It’s the foundation that ties together every part of revenue cycle management (RCM). For vendors already in the RCM space, embedding payments turns a point solution into a growth platform.

Unified Payments = Stronger Revenue

The strain on healthcare finances is clear. Hospitals lose an average of $5 million annually to denied claims, equal to about 5% of net patient revenue.*  Across the industry, providers spent nearly $20 billion in 2022 fighting denials, with more than half of that wasted on claims that ultimately should have been paid.**

At the same time, patient out-of-pocket costs continue to climb, shifting more revenue collection to the front desk, portals, and mobile channels. Healthcare organizations manage much more than co-pays. A hospital, for example, handles reimbursements from payors, vendor invoices for medical supplies, business-to-business transfers with partner organizations, cafeteria and food service transactions, pharmacy sales, and patient payments across dozens of departments.

Payments flow through the entire financial system and addressing only a portion leaves opportunity untapped. Why payments belong in the suite RCM has always been fragmented. One vendor handles eligibility, another automates coding, and a third manages denials. They all approach the same provider from different angles.

Strengthening the Revenue Cycle

An ISV that already plays in this cycle has an immediate opportunity: integrate payments and financial services functionality and deepen the value it delivers to healthcare clients and their patients. Patient and payor payments are a core part of RCM, and they matter enormously to providers. Healthcare organizations also manage vendor invoices, business-to-business transfers, and internal flows such as cafeteria and pharmacy transactions. Together, these represent the full picture of how money moves across the enterprise.

When ISVs address both RCM and the broader payments landscape, they create a more complete solution. Patient and payor collections strengthen the revenue cycle. Vendor and internal payments expand the reach to the entire financial system. The companies that bring these together position themselves as financial partners with staying power. Owning payments creates durability when a platform becomes the rail for money movement, it stops being a feature and starts becoming the foundation of the organization’s financial operations.

Payments are sticky by nature. Once embedded, they are extremely difficult to replace. That durability makes them one of the most powerful levers for long-term growth, extending customer lifetime value and creating room for expansion into adjacent services. This is where the opportunity becomes clear. Providers are looking for partners who can support the entire strategy for how money moves — from patients and payors to vendors and internal services like pharmacy and cafeteria.

The ISV that unifies those flows stops being a point solution. It becomes infrastructure, the layer that healthcare organizations depend on to function.

A Strategic Path Forward

Healthcare providers are under pressure to prove ROI quickly. They care about fewer denials, faster reimbursements, higher collection rates, and more satisfied patients. Payments are the most direct lever that ties technology investment to financial outcomes.

For SaaS companies, leading with payments opens doors to conversations that matter most: how the hospital’s financial system operates and how it can be improved. The path is clear. Start with any part of RCM. Layer in payments. Then expand into becoming the financial foundation for all money flows across the enterprise. That is how ISVs move beyond point solutions and secure their place as long-term partners.

Healthcare’s financial backbone is payments. If a SaaS company can solve even a slice of the revenue cycle, it can also solve payments. Providers are asking for every payment option, from wallets and ACH to buy-now-pay-later and embedded finance. Whoever unifies those flows will not just add value, they will become the infrastructure hospitals rely on.

That is where Elavon comes in. We provide the payment solutions ISVs need to expand into healthcare. By embedding modern payment options into their platforms, SaaS vendors can broaden their offerings, take ownership of provider payment strategies across patients, payors, vendors, and internal services, and position themselves as indispensable. Elavon enables SaaS companies to use payments as the lever for vertical expansion and durable growth in healthcare. Connect with us to learn more.

 *Journal of AHIMA

**ii Fierce Healthcare

The post Expanding Into Healthcare: ISV Growth Through Embedded Payments appeared first on PaymentsJournal.

Organizations routinely ask employees to take clients out to lunch or attend industry conferences. Yet the expense management process designed to support these essential functions is often manual, time-consuming, and prone to delays, errors, and misuse.

In a recent PaymentsJournal podcast, Susie Shyatt, Business Development Executive at B4B Payments, and Hugh Thomas, Lead Commercial Payments Analyst at Javelin Strategy & Research, discussed the common challenges businesses face in managing expenses—and how embedded payments can help streamline this inefficient process.

Expense Reimbursement Vs. Corporate Cards

One of the most common issues in the expense management process stems from employees being required to use their own funds to cover company expenses. First, this means the employee must have sufficient funds available—something that can be a challenge for costly business trips involving airfare and hotel stays.

Another issue arises once the employee returns, as they must provide documentation for their expenses, which then needs to be manually processed. This can lead to delays or errors in reimbursement. There’s also the risk of abuse in the process—something that, in some cases, has even been inadvertently encouraged by management.

“With some companies that we’ve worked with in the past, their C-level groups are touting the ability to get points and earn rewards using personal cards as a benefit to new hires,” Shyatt said. “Whereas the HR and payroll and finance people see it as a headache, where they’re having to reimburse without knowing exactly what all of the payments are being utilized for.”

These challenges with expense reimbursement have led many companies to adopt corporate cards. However, company credit cards can present hurdles of their own.

“At the end of the month, you have to take this big bundle of receipts and photocopy them and get it back to somebody who then has to look through all that stuff and sign off on it,” Thomas said. “It creates tons of extra work for the payables department. It creates extra work for the payroll department. Frankly, it’s not anywhere as safe or compliant a way to buy on behalf of a company as when you’re having somebody submit their own personal expenses.”

Embedding for Speed and Visibility

Among all these pain points, one of the biggest barriers to streamlining the expense management process is that organizations are often unaware of just how inefficient it really is. Multiple groups within the same company may be involved, resulting in a fragmented, manual solution where items can easily get lost in the mix.

As a result, the expense management process becomes frustrating not only for finance office staff, but also for employees.

“Especially as younger generations have entered the workforce, they’re used to everything being quick in their personal lives,” Shyatt said. “You can go to a restaurant with 15 people and after one person puts it on a credit card, within seconds, everybody has paid that person back. It’s very confusing why a work payment should take so long, when I can make a transaction on a website, and everything is there in seconds.”

Payments technology is the reason these interactions are possible. Much like the innovations that allow roommates to seamlessly split a rent payment, embedded payments can be used to accurately reimburse an employee for a hotel stay. Additionally, embedded solutions can equip employees with the tools they need to manage expense activities upfront, which can help mitigate concerns about payment delays.

Embedding payments into the expense management process also brings substantial benefits to organizations. While this technology likely won’t replace staff members, it can reduce the amount of time finance personnel spend processing expense documentation—freeing them up to focus on more strategic tasks.

It also gives organizations greater control over how funds are being spent. When employees use personal funds to cover expenses, there’s often a lack of transparency into how and where those funds are sourced.

In addition, visibility into the expense management process is often increased because these solutions allow organizations to manage both employee and outbound payments from a single platform.

Many solutions also support faster or instant payment types—and real-time payments benefit not only the recipient but the organization as well.

“When you’re using these embedded solutions or expense management tools, it gives you more ability to maintain your working capital, and it gives you a better idea of where you truly stand from a cash flow perspective,” Shyatt said.

Removing the Inertia Barrier

Even though there are clear benefits to adopting embedded payments in the expense management process, many organizations worry that integration will be too costly or place too much burden on the IT team.

However, with the rise of embedded payments technologies, the biggest obstacle to streamlining the process is often resistance to change.

“Inertia is arguably the biggest barrier,” Thomas said. “If there was no inertia in the world, there still wouldn’t be check payments in the United States, after pundits like me have been talking about check payments disappearing for as long as I’ve been in this business. These things don’t change overnight. They don’t change over years necessarily, and that’s mostly a factor of how people run their businesses.”

Though many companies are focused on day-to-day operations, the benefits of modernizing expense management make it well worth the effort to step outside their comfort zone.

“At a lot of the companies that we work with, payments are not their core business, it is just part of what makes their business run,” Shyatt said. “In their mind, it can be a little daunting to look at these big, embedded solutions and think about adding all of these pieces into what they’re doing today, when it’s not the core business that they know.”

Deep Diving for Solutions

The first step for these organizations is to take a deep dive into their expense management process from end to end. They should talk to their accounts payable and payroll staff, as well as any employee who regularly participates in the expense reimbursement program. Then, the organization can identify the true pain points in their current process.

Next, the company should search for solutions that can meet these needs. This could include evaluating whether a platform can integrate with existing systems or finding a solution that offers more robust compliance reporting functions.

Organizations should also assess whether they need to leverage multiple payment types—such as payment cards, ACH, or real-time payment rails—to optimize their expense management process. Another consideration is whether they require a platform that can support payments in multiple currencies.

Once the organization has identified its needs, it can begin to address the inefficiencies in this critical function.

“A lot of times, especially at a higher C-level, we think we know what the problems are and what the headaches are, but we don’t take the time to get in the weeds and truly figure it out,” Shyatt said. “It goes back to knowing your pain points. Knowing exactly what you need not only helps with efficiencies within your company, but it also helps with your cost savings as well, because those go hand-in-hand.”

The post How Embedded Payments Is Optimizing the Expense Management Process appeared first on PaymentsJournal.

As the worlds of technology and financial services converge, the pace of innovation is increasing exponentially. The advent of AI, cloud-based, headless architecture, and ‘everything-as-a-service’ presents a challenge to ISVs looking to adapt to a rapidly changing ecosystem and remain competitive in a crowded marketplace. So, how can you future-proof your business for scalable growth and differentiate yourself from the competition?

Let’s take a look.

Changing Market Dynamics

Developing a high-quality software solution that addresses specific market problems is fundamental, but reaching a wider audience, scaling your operations, and optimizing your revenue potential often means partnering with technology providers that can provide additional value. Integrating payments is one such use case. However, simply offering payments within your software solution has become table stakes. Beyond offering payment processing functionality, ISVs need to embed more value throughout the payments lifecycle to provide a seamless, and connected, end user experience.

Whether it’s offering flexible lending solutions via API integration or providing alternative payment methods, embedded finance means increased revenue streams, stronger company valuations, and stickier relationships with your customers. In fact, embedded finance is outpacing ISV market growth. By 2030, embedded finance will account for $320 billion in revenues worldwide¹. ISVs that understand this, and take advantage of payments, banking, and money movement capabilities set the stage for their success.

Understanding Vertical Use Cases

Banking and money movement APIs enable ISVs to rapidly build and test functionality to address, and exceed, quickly changing marketing expectations. In a general sense, it can mean managing same-day ACH transactions, sending real-time payments/disbursements, originating check payable requests, and accessing important account information to move money.

Of course, how these APIs add value is dependent on your industry and the market challenge you are trying to solve. For example, a healthcare software solution’s main goal may be to streamline revenue cycle management and automate time-consuming and arduous manual processes. Imagine the additional value provided to the end user with embedded FBO functionality. The ISV can now provide a secure, digital, and seamless process for insurance claim disbursements.

In the home services vertical, you may want to offer your merchants the ability to offer flexible lending options for large ticket home improvement purchases. An integrated point-of-sale lending solution provides financing options for consumers while providing instant merchant funding – all while providing you with an additional revenue stream and helping your merchants generate more sales. It’s win-win.

Putting it All Together – U.S. Bank | Elavon

Backed by the strength and stability of U.S. Bank, Elavon can provide the best of both worlds—the financial services infrastructure of one of the country’s most established banks and the agility needed to navigate the competitive software industry and constantly evolving payments industry. Whether you’re new to the industry or a seasoned ISV, we’ll help you build your long-term strategy.

Decades of experience working with partners has enabled us to develop an exceptional implementation, training, and incubation experience that enables you to achieve your maximum potential as a partner with us. It’s why more than 1,000 integrated partners, 1,700 financial institutions and 350 ISOs/MSPs trust us to grow their business.

Find out what’s possible. Call us at: 800.725.1243.

¹ BCG+QED Investors

The post Payments as a Growth Strategy: How ISVs Can Optimize Revenue Potential with Embedded Finance appeared first on PaymentsJournal.

Handling takeout orders and processing payments by phone is a common pain point for many merchants. To ease this burden, CardFree and SoundHound AI have launched a platform that uses artificial intelligence to automate the ordering and payment process.

The solution has already been rolled out at Torchy’s Tacos, a Texas-based chain with over 130 restaurants across the U.S. The platform integrates SoundHound’s voice technology with CardFree’s checkout platform, including its text-to-pay technology.

By automating these processes, the solution aims to reduce workloads and mitigate fraud, with AI handling the heavy lifting. In addition, the platform allows customers to accrue and redeem loyalty points, use gift cards, and pay with digital wallets like Apple Pay or Google Pay.

Converging Trends

The CardFree and SoundHound platform represents the convergence of two key trends in the merchant experience: AI and the growing integration of embedded finance.

“A question I’m often asked is: what is the difference between integrated payments and embedded payments?” said Don Apgar, Director of Merchant Payments at Javelin Strategy & Research. “Buying anything is a two-step process; first, you buy something and then you pay for it.”

“Integrated payments attach the payment workflow to the purchase, so it all runs together seamlessly,” he said. “Embedded payments incorporate the payment into the purchase, reducing a two-step process to one. As you can see in this process for Torchy’s Tacos, both ordering and paying are faster and easier for the customer, and the streamlined process means better throughput for the merchant.”

Global Reach

Business of all shapes and sizes have been experimenting with AI to optimize time-consuming tasks. Some of the largest fast food chains, such as McDonald’s, Wendy’s, and Taco Bell, have already piloted AI-powered voice technology to take drive-through orders.

However, concerns about errors that could lead to reputational damage and the loss of the human touch in customer interactions have largely stymied these efforts for now.

Despite these concerns, the benefits of automated order-taking suggest that merchants will likely continue exploring AI and embedded finance solutions.

“Embedded payments are changing the way Independent Sales Organizations (ISOs) go to market with card processing services,” Apgar said. “If you’re selling embedded payments, you can’t just sell payments, you have to sell the process that the payment is embedded in. In this example, CardFree bundles their payment processing with their ordering solution and SoundHound AI brings a comprehensive ordering and payment solution to the merchant.”

The post How AI Is Streamlining Takeout Orders and Payments appeared first on PaymentsJournal.

An increasing number of merchants are shifting their view of payments systems from functional tools to key drivers of business growth.

According to a survey conducted by PXP among U.S. and UK merchants, nearly two-thirds recognize payments technology as essential for expansion. Over half of respondents are actively leveraging payments tech to unlock new revenue streams, monetize payment capabilities, and increase their appeal to consumers.

“This data from PXP underscores what Javelin is seeing in our research—a great payment experience for customers is becoming table stakes for retailers, both online and in-store,” said Don Apgar, Director of Merchant Payments at Javelin Strategy & Research. “Merchants are working hard to deliver a better payment experience than their competitors.”

Expanding the Menu

One way to improve the customer experience is by offering more options, and this trend is becoming more prevalent across the merchant space. According to PXP, over a third of respondents are expanding their payment options. Merchants are also increasingly aiming to provide an omnichannel experience, where customers can seamlessly transition between a brand’s in-store, online, and mobile environments.  

However, delivering this experience is easier said than done. Merchants often face challenges in determining how to allocate funding and resource investments for their omnichannel solutions. In addition, tracking and managing inventory across e-commerce and physical locations can quickly become cumbersome, especially as a business scales.

Augmenting the Brand

To solve for these challenges, there has been an increasing demand for enterprise point of sale (POS) systems, according to a separate data from Shopify. An enterprise POS is a unified system that connects sales, loyalty programs, and inventory across multiple channels. This cohesive solution, powered by APIs, provides merchants with a holistic view of their operations.

Payments data plays a key driver in the omnichannel experience, as most merchants rely on it to track customer purchasing activity across various sales channels. However, as organizations introduce more payments solutions, it is important to ensure these systems enhance the brand experience, rather than detract from it.

“Enterprise retailers tend to value flexibility and extensibility above all other features in a POS platform—every retailer has their unique spin or ‘secret sauce’ that makes their business stand out from competitors and the POS needs to accommodate that,” Apgar told PaymentsJournal.

The post More Merchants Consider Payments Technology Indispensable appeared first on PaymentsJournal.

Highnote announced the launch of its acquiring solution, which, combined with the firm’s existing issuing solution, will create a unified card payments platform for organizations.

While more aspects of payments processing have been embedded into software solutions, many businesses still rely on multiple providers to meet all their payments needs. Highnote’s platform, however, is designed to support full pay-in and payout functionality.

“It’s an all-in-one unified platform with a centralized general ledger at the core,” John MacIlwaine, CEO of Highnote, told PaymentsJournal. “It’s not a bolt on, we’re not pivoting the business. We’re strong believers in core issuing, but most of our customers are also excited about being able to acquire the cards that they’ve issued and even general acquiring as well.”

In the Cards

For four years, Highnote has built its operations around a platform that helps businesses issue an array of card options—from customizable debit cards to credit cards to loyalty cards. However, the inclusion of acquiring has always been part of the plan.

“My background has been in acquiring,” said MacIlwaine. “I came from Braintree, which is PayPal’s acquiring business. When we started Highnote, we were looking at both issuing and acquiring, but we needed to pick one to start with because otherwise you get spread too thin. We felt like the bigger near-term opportunity was in issuing and embedded finance, but we wanted to architect the platform knowing that we’re going to incorporate acquiring.”

Highnote’s API-based acquiring platform enables companies to accept card payments online via plug-in checkout software or custom features they design. It’s directly integrated with major payment networks, improving data access and transparency while lowering costs for customers.

Securing Funding

Highnote also raised $90 million in Series B funding, bringing its valuation to more than $750 million. With the new funding, Highnote plans to invest more heavily in its platform to deliver tailored embedded finance solutions for its clients.

According to MacIlwaine, the company aims to create a secure and scalable platform using APIs that gives its clients comprehensive access to their data—down to the ISO message level. This allows their clients to create custom fraud rules, conduct velocity checks, and share information with their consumers in the way that best suits their needs.

“What’s the differentiator?” MacIlwaine said. “We have a product platform that essentially allows customers to innovate. We thought, how can we create this platform that allows for innovation to occur by our customers because they know their markets better than we do? They know how to compete; they know how to drive revenue.”

“The analogy is, if you look at an Apple iPhone, you don’t go to Apple to build all the apps,” he said. “Their engineers are not building the apps, they built a platform that has the APIs and it’s secure, but all the innovation is done by customers. That is something that hasn’t really existed in payments.”

The post Highnote Adds Acquiring Solution to Offer a Unified Payments Platform for Businesses appeared first on PaymentsJournal.

When we talk to organizations that have thus far not gotten involved in embedded finance, we frequently hear key decision-makers refer to it as an efficiency play. And because they see it as a streamlining tool, they often push it to one side, seeing it as nice-to-have rather than must-have.

Such thinking overlooks the enormous growth potential of embedded finance and is one of the reasons its adoption is lagging in the B2B space when compared with the B2C sphere.

Time and again studies have shown that the buy now, pay later (BNPL) services that are commonplace in the consumer space lead to shoppers spending more and therefore businesses making more.

No One-Size-Fits-All in B2B

The obvious question then is if services such as Klarna and Clearpay can have such a huge impact on B2C companies’ growth, can this concept be translated into the B2B world to accelerate growth?

The answer is both yes and no. While embedded finance has the power to boost corporates’ revenues, it may not happen via tools that are industry agnostic.

For the B2B world to succeed in embedded finance, companies need to tailor their offerings to their specific industries. It’s undoubtedly trickier than integrating a ready-made product into their content management system, but it’s also far more powerful because it becomes a differentiator.

Using the unique insights they have into their supplier and distributor networks, organizations have the ability to design vertical propositions tailored to specific industries.

We work with a beverage company that primarily sells beer. Like many other companies in the sector, its growth had been slowing as it competed with many other breweries selling a highly commoditised product. Traditionally, the big lever in such industries has been volume-based discounts, but everyone offers these. What this company has done to set itself apart is build a unique lending product that frontloads the discount. Instead of offering a discount at the end of a period based on the volume purchased, it loans the money interest-free upfront instead, with the caveat the funds don’t need to be repaid if the target is reached.

This recognizes the often cash-poor nature of its distributors and how much more value it has as a partner this way.

If we take it a step further, by offering a fully integrated financial offering to your partners, the potential becomes endless. Imagine you’ve got full data on one of your bars because you’re providing all its POS and payment processing systems. The data acquired by having visibility over all transactions taking place is hugely valuable—it can inform future investment decisions and also provide a useful credit profile of the business.

This data may show a partner bar as being in good health, but then an industrial freezer worth £40,000 unexpectedly breaks down. Good health and having £40,000 lying around aren’t necessarily the same thing and the only way for it to stay afloat will be a loan.

Banks are likely to shy away from such a loan due to the lack of assets available as collateral, or at least be far too slow to grant one quickly enough to allow the bar to remain in business.

But if an organization has an asset financing deal with an equipment supplier, it could underwrite the loan itself—helping to keep the supplier’s business afloat while also securing future business and earning interest through a fee-sharing arrangement.

Bespoke Is Best

There’s also a pharmaceutical company that utilizes bespoke financing arrangements to grow its share of its distributors’ businesses.

Given they aren’t seasonal or even particularly discretionary like hospitality businesses, pharmacies don’t have the same cash flow challenges and levels of uncertainty as bars, so the approach that worked for the beverage company couldn’t simply be copied over.

However, the pharmaceutical cooperative had done some research and realized that modernized pharmacies were selling 15% to 20% more like-for-like than unmodernized pharmacies. They decided to offer interest-free loans to partners to modernize their retail outlets, in return for an agreement that those outlets would increase the percentage of their products stocked. The increase in revenues was far greater than the interest it could have made on the funds loaned out, therefore boosting its own growth as well as that of its pharmacy partners.

In some industries, the main appeal of embedded finance isn’t financing but payments. Consider a drop-shipping provider where production is based in China, while storefronts are spread globally. Given the reliance on an international supply chain, payments can effectively make or break operations.

To ensure consistent revenue flow for its clients, this provider implemented an orchestration platform capable of switching between payment providers based on factors like cost, returns, and other nuances, to keep the system flowing at all times. In logistics, financing will undoubtedly play a role in embedded finance, though likely on a shorter-term basis compared to industries like hospitality or pharmaceuticals.

A perhaps more obvious point of commonality in the embedded finance proposition is the opportunity to earn interest. Acquiring fees are high and funds that sit within this ecosystem are likely to be earning interest while they are held by corporate partners.

In addition, while the means of achieving it may be different, a key goal of any organization designing an embedded finance proposition for its clients is to ensure retention.

It’s clear there are themes that run across industries when it comes to making embedded finance as successful in the B2B world as it has been in the B2C space. But the key to success for corporates is tailoring their embedded finance offering to the specific requirements of their clients’ industries. This will position them far better than rolling out across-the-board solutions such as those used in the B2C world.

The post Embedded Finance Is More Than an Efficiency Play—It’s a Growth Tool appeared first on PaymentsJournal.

The U.S. has lagged behind other countries in the widespread adoption of financial innovations like open banking and digital assets. However, in the world of embedded finance—where financial products are integrated into non-bank software—the United States is leading the way.

According to a report from PSE Consulting and The Strawhecker Group (TSG), a third of small to medium-sized businesses in the U.S. use embedded finance services provided through software-as-a-service companies. In comparison, only 11% of smaller businesses in the UK and 6% in Germany and France use these services.

The study found that European merchants weren’t averse to SaaS solutions, but that the software companies in the region weren’t able to pique merchants’ interest with their current embedded finance solutions.

“The number of small businesses in the U.S. who have adopted embedded finance is even higher, according to a recent survey by Javelin’s small business practice,” said Don Apgar, Director of Merchant Payments at Javelin Strategy & Research. “That research indicates that roughly half of U.S. merchants no longer obtain a business account from their bank. They are increasingly turning to their technology provider.”

No Business Too Small

In the past, a merchant’s point-of-sale system required multiple computers interconnected to form an internal server. This setup meant that a company needed substantial revenue to justify spending thousands of dollars on a payments system.

However, with the customer integrated system (CIS) model, merchants don’t require installed software to operate their business. They can purchase a monthly subscription from a SaaS provider and process payments through a tablet or device.

“It has made it much more accessible for businesses, and now there’s no such thing as a business too small to have software,” Apgar said. “That’s one of the differences between the U.S. and Europe. There has been a substantial focus on technology in the U.S., and companies like Square, Shopify, and Toast have made embedded finance technology affordable.”

Though the tech might not be ubiquitous, merchants worldwide have overwhelmingly indicated they would prefer to transition away from traditional payments processors to software platforms. The PCE and TSG study found approximately 70% of small to medium-sized businesses in the EU and the U.S. said they would choose a software platform the next time they select a payments supplier.

Beyond Embedded Payments

In Europe, embedded finance still mostly refers to payments processing within a software platform. In the U.S., software companies are moving beyond payments to incorporate a range of financial products.

“Point-of-sale companies like Toast are already offering additional solutions like business checking accounts,” Apgar said. “Embedded lending is gaining traction, as companies like Square already offer business loans to merchants. Players like Shopify, Toast, and Lightspeed are driving significant revenue from embedded finance, and they are constantly looking for new products they can bundle.”

One of the most powerful benefits embedded finance offers merchants is the ability to centralize accounting functions. As SaaS platforms include more financial aspects, they have the potential to be the central hub for all of an organization’s financial needs.

Small businesses have access to more data than ever before, but it often comes from disparate sources. They may pay a monthly SaaS subscription for tools to manage inventory and process credit and debit card payments. In addition, small businesses require a checking account, and the ability to receive and pay invoices from suppliers. They also need to manage employee payroll and benefits.

Most small businesses invest substantial time and money hiring accounting services to align all these data sources. If a merchant can reconcile all those functions in one place and with minimal effort, it could have a dramatic impact.

Managing all the accounting can be a major time drain. Even if a CPA is handling it, they will still need guidance on certain aspects since they don’t have in-depth knowledge of the business’ operations. The scarcest resource for small business owners today is time. By connecting all the data sources and uses, much of the manual work can be eliminated.

The Technology Intersection

As software companies take on more financial functions for merchants, the role of financial institutions in the business banking process has been diminished. However, the model has created an opportunity for banks to use software companies as distribution partners.

Financial institutions can embed their services directly into a merchant’s point-of-sale application to attract more customers.

“Fintech is the intersection of finance and technology, and software companies are actively looking for ways to disintermediate banks out of the financial chain,” Apgar said. “If half of merchants no longer go to a bank to open their merchant account, that’s significant. If software companies are already handling payments processing, it makes sense that banks should partner with these providers.”

The post The U.S. Is Leading the Way in Embedded Finance appeared first on PaymentsJournal.

Embedded finance has increasingly become a fixture in the commerce landscape, and consumers now expect payment options like buy now, pay later at the point of sale. While these payment options might drive more sales for merchants, they represent just a small fraction of what embedded finance can offer business owners.

In his new report, Embedded Finance: What Do Merchants Want?, Don Apgar, Director of Merchant Payments Practice at Javelin Strategy & Research, examines embedded finance trends and explores their impact on merchants.

The Promise of Embedded Finance

Most merchants rely on software to run their business, often paying a monthly software-as-a-service fee for tools that helps them manage inventory, rentals, and time and attendance. This software typically includes built-in support for credit and debit card payments.

In addition to this, small businesses need a business checking account to deposit earnings and pay bills. They also require the ability to receive and pay invoices from suppliers and manage employee payroll, including health and retirement benefits.

Business owners receive statements from their payment processors detailing the amounts processed, as well as from their banks listing the amounts received. They might also get statements from their payroll companies outlining employee payments.

Most small businesses invest substantial time and money into accounting services to reconcile these various data sources. Even though all the information is available online, it’s not currently connected.

“As a business owner, what if you could access your checking account at your shop directly through your point-of-sale system?” Apgar said. “As you’re processing payments, you could pull a report that says you have $1,000 in credit card sales. Wouldn’t it be great if the point-of-sale system could log into your banking portal and verify that the $1,000 was received? The business owner can immediately check that box, it’s reconciled.”

With many time and attendance systems, employees log in and out through their phones, and their hours are automatically tallied. The payroll application then processes payments accordingly. With an integrated system, businesses wouldn’t require a separate payroll application.

The real potential of embedded finance, from a merchant’s perspective, lies in serving as a central connection point. Embedded finance software could centralize and utilize data from a single hub, giving small businesses the power to share and manage data across various functions.

“It’s a huge time suck, having to do all the accounting,” Apgar said. “Even if you have a CPA doing it, the CPA is going to need guidance on certain aspects, because they don’t know your business. The scarcest resource the small business owner has today is time. If all the sources of data and all the uses of data are connected, it eliminates a ton of manual work.”

BaaS Integration

Embedded finance is intertwined with banking-as-a-service to the point where one topic can’t be discussed without the other. This model has created an opportunity for banks to use software companies as distribution partners, just as in the payment space. Banks who want to attract more customers could embed their services directly into a merchant’s point-of-sale application.

“This is basically what is happening with payments,” Apgar said. “More software companies bundle payment processing with the software services business owners use. It was a function many banks previously served, but they have been largely disintermediated out of the payment processing loop by software companies. BaaS trends indicate that will happen again with other financial services, like basic banking services.”

If software companies are already handling payments processing, it makes sense for banks to partner with these providers. This way, business owners could open a checking account directly through the software at the same time they open a payments account.

The issue is that many banks have been content for software companies to handle those duties. As embedded finance gains traction, banks should look to software partners to distribute their financial products. However, financial institutions must ensure they have strong controls in the relationship, because they will still have to retain compliance responsibilities.

While embedded finance is still in its nascent days, banks should consider the role they will play and their strategy for scaling up. Whatever that role will be, it’s critical to start planning now.

“If your bank doesn’t want to play in that sandbox, you should have another plan,” Apgar said. “We’re still early in the process and banks won’t be cut out tomorrow. However, over the next couple of years we will approach a tipping point. The banks with a plan will start to grab market share from the banks without an embedded finance market plan.”

The post Embedded Finance Can Be a Central Connection Point for Merchants appeared first on PaymentsJournal.

Fintech startup Rainforest has received $20 million in Series A funding, marking another significant milestone in its embedded finance journey.

According to TechCrunch, the company also signed dozens of new companies to its platform and increased its payments volume 17 times in the past six months.

Rainforest stated it has more than doubled its valuation in the same period, though it declined to provide specific financials. This growth was achieved by building an embedded finance platform geared directly toward software platforms, unlike most competing solutions that are aimed at merchants.

“There are too many payment products akin to fast food—they fill you up, but you’re sluggish, not nourished,” said Rainforest CEO and founder Joshua Silver. “(It’s the) same for a SaaS. Software companies can increase revenue per customer by two to five times by adding fintech, earning more revenue from embedded finance than from their core product. But that’s only possible when it’s fueled the right way.”

A Different Model

Rainforest has come a long way since its 2022 founding and believes it can differentiate itself because it was designed as an embedded finance company from the start. The company earns revenue from transaction fees, so its clients only pay for what they use. So far, the platform has added support for Apple Pay, 3DS, and Plaid.

Many of its competitors are payment processors who bolted on embedded finance solutions along the way.

Embedded Era

It’s not immediately clear if Rainforest will be able to continue its rise in an extremely crowded and competitive space. However, there’s no doubt that the era of embedded finance is approaching. The U.S. market for embedded finance reached $2.6 trillion in 2021 and is forecasted to exceed $7 trillion by 2026.

The industry is booming because companies increasingly want to offer a wider array of financial services directly in their apps, without becoming fintech companies themselves due to compliance and regulatory risks.

“The market we’re in right now is massive and nowhere close to being penetrated,” Silver said. “There are thousands of mid-market vertical SaaS platforms in the U.S. alone. UBS estimates total U.S. small-to-medium business (SMB) processing volume at $2.2 trillion, and an increasing portion of that volume is being processed through SaaS platforms as SMBs move away from traditional processors.”

The post Startup Rainforest Aims for SaaS-Centric Embedded Finance appeared first on PaymentsJournal.

Whether as consumers or merchants, simplicity is key when it comes to purchasing goods and services. While merchants have historically offered in-app payment options, this is merely scratching the surface. Embedded finance represents a paradigm shift, integrating a spectrum of financial services into non-financial applications.

Embedded finance is rapidly replacing embedded payments as the ultimate financial solution to eliminate financial transaction friction. Independent software vendors (ISVs) empower merchants with a consolidated platform to manage their cash flow. From accepting payments to accessing instant capital loans without credit checks, merchants can benefit from a financial toolkit. Soon, even more services will be added that utilize artificial intelligence (AI) to predetermine the exact type of additional products a merchant might need and offer them at the right time.

By embedding a suite of financial services within familiar apps and platforms, ISVs enhance the user experience, creating a unified ecosystem for financial management.

For small- and medium-sized businesses (SMBs), the importance of comprehensive embedded finance solutions cannot be overstated. Typically, the median small business has about $12,000 in the bank; for SMBs, cash really is king. To make payroll, purchase inventory, and pay rent, they need real-time cash visibility. They need to know where it is (and that it’s safe), where it’s going, and how to get there without delay. SMB owners may not have a deep background in finance, so user-friendly interfaces and intuitive designs are crucial to ensure they can easily navigate and utilize embedded finance tools effectively.

For ISVs, embedding financial services within their business apps broadens their market appeal. It makes it easier for merchants to understand their entire money management chain, create multiple bank accounts to diversify locations for cash, access financial solutions when needed, reduce the time it takes to access funds, and strengthen protection against cybercriminals.

Advances in Embedded Finance

There have been many vital advances in embedded finance, including leveraging historical business information to enable fast loan pre-approval without accessing credit history. In addition to increased efficiency and approval speed, embedded finance offerings can increasingly utilize the customer’s financial data to determine, for example, when a merchant might require a short-term loan or access to advanced accounting software based on their increased cash flow. By offering products and services at the right time, ISVs can increase their chances of a sale while forging a stronger relationship with merchant customers who feel understood and cared for.

A Win-Win for ISVs

The collaboration between embedded finance providers and ISVs creates a synergy beyond software functionality, offering comprehensive solutions that address both the operational and financial needs of SMBs. This approach can lead to sustained growth and success for both parties in an increasingly interconnected and digitized business environment.

The opportunity to generate additional revenue streams beyond subscription fees, linked to the cash flow facilitated through the platform, is a compelling prospect for companies in the embedded finance space. Implementing a transparent and equitable fee structure while consistently adding value to the platform can contribute to long-term success in this dynamic and evolving industry.

Improving Cash Management

By finding a financial partner that combines the solidity of traditional banking with a forward-thinking and plugged-in approach, software providers can position themselves for success in the dynamic landscape of embedded finance, allowing for innovation while maintaining the trust and stability that users expect from financial services.

As technology advances, software providers can explore, innovate, and unlock new dimensions of value for their businesses and customers. The convergence of software and finance within embedded solutions is reshaping the financial services landscape, offering a glimpse into the future of a more interconnected and digitally integrated economy.

The post Embracing the Era of Embedded Finance appeared first on PaymentsJournal.

European consumers are more likely to be loyal to brands that offer buy now, pay later (BNPL) services and cashback options, according to a survey conducted by Vodeno and Aion Bank.

Approximately 37% of consumers surveyed were more likely to look for brands that offered BNPL services and other flexible payment opportunities.  Additionally, 50% of consumers in the 25-35 age group have reported that they will remain loyal only to brands that offer BNPL and cash back.

“The benefits of embedded banking cannot be ignored, and our research offers strong evidence that consumers are not only using these products, but it is also positively influencing their loyalty to BaaS-enabled brands,” Kim Van Esbroeck, Country Head for Aion Bank Belgium and Chief Revenue Officer for Vodeno/Aion, said in a prepared statement.

Embedded Banking Offers Convenience for Consumers

The cost-of-living crisis continues to weigh heavily on consumers worldwide. Inflation has played a major role in the crisis, with the cost of food, housing, electricity, and other essentials increasingly out of consumers’ reach.

Currently, traditional banks struggle to meet the immediate financial needs of consumers. The rise of embedded banking exemplifies the need for access to cash quickly and conveniently. This can already be seen via ride-share apps that allow car drivers to have immediate access to their funds after their customers pay them. That quick and easy access allows the drivers greater management of their funds.

For cash-strapped consumers, embedded banking grants access to easy, instant credit without waiting for approval or having to jump through the traditional banking loops to qualify.

What Banks Can Do to Get Onboard with Embedded Banking

Embedded finance will continue to grow. It offers a seamless consumer experience and greater financial access. To remain competitive, banks must hone a strategy to adopt embedded finance as part of their own business model. They can do so by constructing their own digital ecosystem that can include partnerships with fintechs, e-commerce players, and digital platforms.

The post Embedded Banking Options Drive Brand Loyalty Over Traditional Banking Services appeared first on PaymentsJournal.

The integration of embedded payments presents software providers with great opportunities for growth. By capitalizing on convenience, customization, and streamlined processes involved in embedded finance, organizations can improve customer retention rates, increase revenue streams, and enhance overall customer value.

With the embedded finance market projected to reach $800 billion by 2030, embracing this technology is not just an option but also a necessity for business platform companies looking to thrive digitally.

In a recent webinar hosted by PaymentsJournal, industry experts Ralph Dangelmaier, CEO of BlueSnap, and Brian Riley, Co-Head of Payments at Javelin Strategy & Research, explored the transformative impact of embedded payments integration. This article delves into the advantages of embedded payments for software providers, the considerations involved in integrating payments, and how organizations can optimize the customer experience to unlock the full potential of embedded payments.

The integration of embedded payments presents software providers with great opportunities for growth. By capitalizing on convenience, customization, and streamlined processes involved in embedded finance, organizations can improve customer retention rates, increase revenue streams, and enhance overall customer value.

With the embedded finance market projected to reach $800 billion by 2030, embracing this technology is not just an option but also a necessity for business platform companies looking to thrive digitally.

In a recent webinar hosted by PaymentsJournal, industry experts Ralph Dangelmaier, CEO of BlueSnap, and Brian Riley, Co-Head of Payments at Javelin Strategy & Research, explored the transformative impact of embedded payments integration. This article delves into the advantages of embedded payments for software providers, the considerations involved in integrating payments, and how organizations can optimize the customer experience to unlock the full potential of embedded payments.

What to Keep in Mind as Payments Integration Is Considered

Software platforms looking to integrate payments should consider a few key factors: onboarding, the opportunity to scale their business, compliance and regulation, whether there’s underwriting and risk staging, and overall, how the solution can improve the customer experience. Let’s delve into each of these and how they can help organizations get the most out of embedded payments.

Onboarding

The onboarding process for software providers is straightforward: A merchant wanting to join a platform fills out an application form. As part of that process, the applicant provides additional data for things like identity verification and anti-money-laundering checks. This data is then sent to the platform’s onboarding system through special APIs.

“With this system, we can quickly onboard merchants in about 15 minutes, and they can start selling their products in 47 different countries almost instantly,” Dangelmaier said.

Some platforms make it mandatory for new merchants to sign up for payments as well. When merchants join the platform, they automatically get the payment services included in the price. “This is becoming really popular, and lots of merchants from different industries are joining these platforms in large numbers,” Dangelmaier added.

Opportunity to Scale

Software and technology platforms are increasingly incorporating embedded financial services as a requirement for new merchants. These platforms are not only signing up merchants for payment processing but also integrating it into their pricing.

This trend is attracting many merchants from different industries, and there is tremendous potential for growth in this area.

“This scalability is crucial for business expansion,” Dangelmaier said. “It’s not just about having a streamlined process that satisfies existing customers; it’s about having the capability to expand and accommodate the needs of new customers. This adaptability is what ultimately strengthens a business.”

Compliance and Regulation

Embedded finance also has built-in tax compliance and regulation offerings.

When it comes to moving money and dealing with payments, a lot of rules and regulations must be followed. It’s not just about setting up a technical system. Legal requirements can vary depending on the country.

“Just because you can make it work in the U.S. doesn’t mean it works in Mexico or the UK,” Dangelmaier said. “There are different underwriting risk rules in every country. We’re connected to dozens of tools around the world to make sure we comply with the underwriting and KYC (know your customer) and AML (anti-money-laundering) standards around the world.”

BlueSnap helps platforms manage these compliance issues by taking care of the regulatory requirements so the organization doesn’t have to spend a lot of money or hire a team to handle that task. Because the rules and regulations are different for each country, BlueSnap connects with various tools worldwide to ensure they comply with the specific rules of each country. Sometimes, the company has to physically check someone’s identity in certain countries before approving them for payments.

“You need to either decide, ‘Am I going to do that on my own, spending millions of dollars higher to comply with the regulations?’ or ‘Am I going to partner with somebody who already has the infrastructure set up?’” Dangelmaier said. “We take the compliance concerns away from the platform and take care of it behind the scenes.”

Visibility Into Underwriting and Risk Staging

Embedded financial services for software and technology platforms involve complex processes related to underwriting and risk staging. Compliance with underwriting risk rules and KYC and AML standards in different countries is crucial, and there are tools to assist with automatic verification.

However, exceptions may occur during the process, requiring additional attention and collaboration with the platform. Certain countries provide particular challenges of physical verification, which necessitate staged underwriting with conditional approval.

“In some countries, you actually have to do a physical check before you board them, so we conditionally approve them,” Dangelmaier said. “Then, we actually got to send (someone) maybe somewhere on a scooter to go verify that they actually are who they are and check their IDs.”

BlueSnap allows businesses to quickly onboard customers and give conditional approval for payments. After the conditional approval is granted, a final verification step can ensure that all necessary information is provided and verified. Alternatively, the conditional approval can be given and the loan processing can begin immediately, similar to how Uber starts processing a ride request as soon as it is confirmed.

Improving Customer Service

When platforms integrate payments, they provide a more convenient and seamless experience for their customers. Merchants no longer have to go to different places or hire experts to handle technical implementation. Instead, everything is handled within the platform. This is especially useful for small and medium-sized businesses.

“I can’t tell you how many people have to hire system integrators to get everything working and get it going,” Dangelmaier said. “If the platform provides a system integration as part of a turnkey solution, the customer experience is just significantly improved.”

Making this integration work smoothly requires three API connection points. The first one is the payment API, which allows customers to make payments. The second is the onboarding risk API, which ensures that customer applications are securely set up with the appropriate banks. The third is the consumption or webhook API, which provides data and reporting back to the platform. These APIs are like the different sections of an orchestra playing together harmoniously.

It can take some time and fine-tuning to optimize the platform for different countries, currencies, and payment types. Platforms like BlueSnap provide support and guidance to help businesses navigate this process and make the necessary adjustments.

The post 5 Ways to Maximize Embedded Payments’ Full Potential appeared first on PaymentsJournal.

Banking-as-a-Service (BaaS) is a game-changing trend that gives brands the ability to embed financial services features within their systems, without having to convert themselves into a regulated financial institution.  

New research from Vodeno and Aion Bank found that a boost in consumer demand for embedded banking products has been largely driven by the cost-of-living crisis, with 56% of businesses surveyed awknowledging it. 

According to the study, 37% of respondents said they were more likely to choose brands that provide BNPL (buy now, pay later) services and other flexible payment features. When it comes to brand loyalty, 44% cited competitive prices as the most significant factor, while slightly fewer (43%) said that a good selection of products drove their brand loyalty.  

BaaS Is Picking Up Steam 

With the acceleration of digital trends, especially during the pandemic, BaaS solutions have become increasingly sought after by businesses to boost their customer base. According to Vodeno and Aion Bank, the total addressable market (TAM) of BaaS providers in the UK and the European Economic Area are projected to grow significantly, approaching a value between $90 billion and $105 billion by 2030.  

Nearly two-thirds (64%) of decision-makers surveyed said they anticipate that mainstream BaaS adoption will be reached within the next five years. In contrast, other reports claim that mainstream adoption could happen in as little as two years. 

The End Goal: A Frictionless Experience  

With more consumers seeking frictionless payment experiences, embedded payment solutions offer a way to make secure transactions within a product or service. This, in turn, boosts customer satisfaction and encourages customer loyalty. It is no longer just a good idea, but tablestakes for both businesses and financial institutions.  

Kim Van Esbroeck, Country Head and Chief Revenue Officer at Aion Bank Belgium said: 

“The benefits of embedded banking cannot be ignored, and our research offers strong evidence that consumers are not only using these products, but it is also positivity influencing their loyalty to BaaS-enabled brands.” 

The post Embedded Payment Solutions Are Driving Customer Loyalty  appeared first on PaymentsJournal.

In an economy where convenience is king, it’s no surprise embedded finance has become a serious revenue driver.

By dropping a lending platform directly into a merchants’ existing workflows, and integrating it with their existing technologies, convenience becomes accessible to all parties in a transaction. Merchants can simplify their tech stack while closing the deal, lenders get their financing products in front of a ready-to-buy audience, and consumers get access to the funding they need quickly.

Of course, with a boom in embedded lending revenue comes a boom in embedded lending providers. Not all will be the right fit for every industry, and not all will come with the due diligence necessary to keep businesses’, and their customers’, sensitive information safe. If you plan to leverage an embedded lending platform, make sure you ask these questions first:

Will a Technical Implementation Give My Team a Headache?

Once an embedded lending platform is installed, customers will encounter a seriously streamlined checkout process. But as all developers know, convenience on the front-end often means complexity on the back-end. It’s important merchants understand what’s required of them before go-live, especially if their IT team is already wrapped up in other digital transformation initiatives.

There’s good news for those who feel that stress headache coming on: merchants can find embedded finance platforms that are essentially turn-key. During the selection process, merchants should ask how much of the integration process the provider will handle. They should manage all onboarding, consumer underwriting, fraud prevention and compliance, allowing merchants to access all their benefits simply by embedding through their APIs. The goal should be to make integration as low-friction as possible.

How Secure Is Your Embedded Finance Platform?

Embedded finance should function as a white label for a merchant, allowing the customer to stay on the business’ website as they submit their personal information. That step offers customers peace of mind, but behind the scenes, it’s important the business understands what steps their embedded lender has taken to keep sensitive data private. After all, a white label can damage brand trust if a breach occurs and the business’ name is on the checkout process.

To avoid that fate, merchants should run down a laundry list of security measures before adopting an embedded lending platform. Has the platform been through regulations? An audit? Are they SOC certified, and are they PCI compliant (PCI compliance regulations stretch beyond businesses that process credit cards)? The platform should be transparent about where data is stored, and how it is used.

How Do You Manage Funds?

For big ticket purchases that involve labor after the sale—say, for instance, installing windows on a house—distribution of funds often becomes a sticking point. After the lending platform receives the bank’s funds, they may release them to the merchant or the window manufacturer, essentially transforming the recipient into a middleman, or even hold on to the money. This could mean the manufacturer must take the extra step of invoicing the merchant, or the merchant must front the money for materials while they wait to get paid. It’s a needlessly complicated process.

Merchants should instead look for an embedded financing partner that pays all parties in line, in real time. This ensures that everyone has the money they need to provide materials and finish the job, without working in a deficit. It also solves concerns around cash flow velocity. The platform should work with customers to release the funds needed to complete the job, while holding on to the remainder until the customer is satisfied.

For Embedded Finance, Don’t Stop at Convenience

An embedded lending platform will make financing easier without upending a merchant’s tech stack. By exploring the embedded platform from all angles—how it integrates, how it protects, how it distributes funds—merchants can find something that fits their needs, while also delivering a simpler, more secure lending process for all parties involved. 

The post Three Questions to Ask Before Adopting an Embedded Finance Platform appeared first on PaymentsJournal.

The markers of the digital consumer revolution are evident: shifting expectations for quick and convenient access to services, the rise of online shopping, and the need for experience-driven interactions, to name a few. Moreover, shoppers desire innovative and seamless digital payment experiences with their favorite brands, an emerging trend poised to redefine how people perceive traditional banks.

Already, brands including Ikea, Starbucks and Lyft offer customers financial services via loyalty and mobile payments, interest-free credit, as well as and debit and savings accounts. The key enabler for these businesses is embedded finance, a software distribution model that allows nonfinancial companies to lend, accept payments, and even offer insurance without requiring a financial institution. Embedded finance will touch many industries, but none more so than retail.

What is Embedded Finance, and What are its Benefits?

Embedded finance describes non-banking businesses or brands integrating financial services into the everyday customer journey. Soon, businesses may no longer interact directly with a conventional bank. Instead, they would leverage e-commerce platforms and software companies that partner with financial institutions to embed financial products into the customer experience. Currently, payments are the primary use case of embedded finance, as they sit at the center of commerce, banking and business services.

This phenomenon presents many benefits to businesses—especially retailers actively searching for alternative sources of revenue and product growth. Today’s shoppers value the customer experience as much as or more than the product or service itself. In particular, modern shoppers value personalization, immediacy, greater trust, and simple offerings.

By implementing embedded finance processes, retailers can provide shoppers with a more streamlined, fast-tracked, and convenient customer experience. Additionally, because the nonfinancial company implementing these embedded finance models has greater control over the customer experience, they can reduce barriers to purchase and minimize friction to encourage shopper loyalty and boost revenue. Furthermore, embedded finance eliminates the headaches of dealing with multiple financial partners.

The Four Steps to Realizing Embedded Finance 

Embedded finance’s market cap will reach $7.2 trillion globally by 2030, and retail use cases will account for almost half of this growth. As such, retailers need to capitalize on this lucrative market opportunity. However, before retailers can start embedding innovative and disruptive financial offerings into the shopper journey, they will need to achieve a clear vision of the future of customer service in their industry. Such a vision will necessitate a robust grasp of current and imminent possibilities, including available financial technologies and services.

Four steps can help retailers translate these objectives into tangible initiatives:

1. A Value Proposition Design
2. Commercial Outcomes
3. Go-To-Market Strategy
4. Operating Model Designs

First, retailers must determine who they are creating value for and how. As part of the value proposition design step, retailers can identify and categorize their various stakeholder groups, pinpoint their challenges, and outline which relevant financial service use cases will address those pain points.

The next step focuses on commercial outcomes or business strategies and objectives that support the embedded finance approach. Common business goals might include customer loyalty and acquisition, growth or the creation of new revenue streams. Retailers can establish a commercially viable proposition and secure buy-in within the enterprise by having these clear strategies, goals and outcomes in place.  

Then, retail brands must create a go-to-market strategy to ensure the products reach the ideal audience through appropriate channels. In this stage, retailers must find the best partners to help distribute and market while building a progressive and controlled product release plan. Likewise, they should ascertain the key metrics to measure success.

The final step is to build an operating model to convert the specific business strategies outlined in previous steps into operational capabilities and enablers. In addition to implementing a flexible technology stack to facilitate the rollout of new products, retailers should identify their risk appetite. Retailers should also determine if they require new talent or teams and if they possess the ability to build embedded solutions in-house or if the help of a trusted third party is necessary.

The Digital Consumer Revolution Waits for No Retailer  

The rapid evolution of shopper expectations and preferences is going toward personalized and seamless digital experiences, and it isn’t slowing down. To adapt accordingly, retailers must invest in embedded finance models, lest they arrive late to the next era of the digital consumer revolution and miss out on this emerging revenue opportunity.   

The post How Retailers Can Enter the World of Embedded Finance Confidently  appeared first on PaymentsJournal.

Using embedded finance is a “win-win” for traditional banks and non-financial companies. The former can access new markets while the latter get to offer a seamless payment experience. This collaboration is underpinned by Banking as a service and Card as a Service models.

Understanding the value of embedded finance

Embedded finance may be one of the top 3 buzzwords currently doing the rounds of the financial ecosystem. In simple terms, embedded finance is the placing of a financial product by a non-financial company in order to sell financial services to its end users, seamlessly weaving these services into its digital end-to-end customer journey.

Non-financial companies providing financial services as part of their customer journey is not really a new thing—think about a retailer offering to finance appliances such as a fridge or a television, or an airline offering credit cards. Such private-label cards have been and still are an important part of card issuing. The novelty that embedded finance offers is a seamless, digital, fully-integrated experience in phase with what today’s customer expects. Consequently, the embedded finance market is forecast to be worth over $7 trillion by 2030, i.e., twice the combined value of the world’s 30 biggest banks¹!

Banking as a Service

Banks possess bank charters which allow them to do business in the financial services industry—i.e. “the keys to the banking kingdom”. They also possess a wealth of expertise in navigating the regulatory and compliance complexities of the financial services industry. Both are tricky for emerging financial services providers to acquire—let alone having to build this type of infrastructure from scratch from an IT perspective, or having to buy a bank. Non-financial companies can access and offer financial services through Banking as a Service (BaaS) models where banks provide these non-traditional financial service providers with access to their regulated infrastructure.

In an embedded finance model, the non-traditional financial service provider acts as the “customer front” and financial product/service distributor. Banks are the financial engine. They use this additional channel to provide financial services at scale and at the lowest possible cost. This arrangement leverages their existing back end without the need to market products through their own distribution networks “from their front end”. Hence, the potential for a win-win situation

Payment cards as part of embedded finance offers

The traditional private-label credit card model has been and remains an important part of card issuing, and the question is how this new wave of embedded finance will impact the future of cards. There are many reasons to believe that it has the potential to unleash huge untapped potential for card issuance.

Cards can benefit embedded finance providers in many ways. Use cases include instant payouts, loyalty points redemption or scaling merchant acceptance. A perfect example is the Uber Pro Card which gives Uber drivers cash back on gas or electric vehicle charging (when drivers use the card to pay) and provides drivers with free automatic cash outs.

Card as a Service: bright days ahead for cards

However, issuing a card is not as easy as it appears, especially from a compliance and regulatory perspective, and this is where Card as a Service (CaaS) comes in. In the same way that Banking as a service takes a lot of the complexity out of banking, Card as a Service takes the complexity out of card issuance, making it easier for non-financial players – particularly for startups – to issue cards and thereby bringing a significant untapped card market into play.

During the past couple of years, some of the world’s most iconic digital companies have launched groundbreaking physical payment cards, pushing back the frontiers of card design possibilities. For example, customers can design their own doodle that will then appear on their card. As they are now set to be joined by scores of innovative startups, banks offering Card as a Service can leverage this hyper-personalization trend to climb up the value chain. These issuers may also tap into new revenue streams with the adoption of multi-application cards and move to a position of even greater value.

Last but not least, as cards are now poised to become even more omnipresent by adding value in emerging, embedded user journeys, the next big step for BaaS and CaaS players might very well be to seamlessly weave adjacent services such as card activation and digital PIN management into the overall card issuance experience—hence creating and monetizing value-added services for embedded finance providers.

The post How Embedded Finance Benefits Both Banks and Sellers appeared first on PaymentsJournal.

Digital payments continue to evolve, and consumers are here for it. If businesses or financial institutions are not equipped to deliver embedded payments, today’s customers will simply seek the ease and convenience of a seamless payment experience elsewhere.

A recent discussion between Hal Ramakers, SVP of Global Solutions at Brightwell, and Brian Riley, Director of Credit and Co-Director of Payments at Javelin Strategy & Research, probes deeper into embedded payments and what businesses can do to meet evolving needs in the global digital payment landscape, how to facilitate cross-border payments amid myriad regulatory infrastructures, and how to gear up their businesses for new user expectations in cross-border payments.

The Importance of Integrating Global Payments Solutions into Business Product Lines

The secret to building retention and loyalty is to innovate the consumer experience. As more consumers choose digital payments to conduct their everyday business, they want something that is seamless and streamlined, rather than having to jump from one platform to another.

“If you look at the industry today, most consumers work with third parties,” Ramakers said. “They’re leaving their banking app to send money, which is not an optimal experience.”

Embedded payment solutions allow customers to purchase items directly from their TV, pay for a cab ride, and even send and receive funds from all over the world, all without taking out their wallet. This trend will only continue to grow.

“There are over a billion people today that send or receive international money transfers. That’s about 30% of the global (consumer) population.”

“Globally, checks are still being sent across borders for vendor payments and consumer payouts. The pandemic shifted the world and moved us five years forward. As a result, consumers changed how they interact with companies and their financial institutions. They’re looking for embedded solutions when they conduct business whether in their bank accounts, through their banks, or through a program managed using a digital solution.”

Embedded Payments Solutions as Key Drivers for Customer Loyalty

Embedded payments solutions, which allow customers to seamlessly and securely make transactions within a product or service, can enhance customer loyalty by providing a convenient and efficient payment experience. By integrating payments into the customer journey, businesses can improve overall customer satisfaction and increase the likelihood of repeat purchases.

“If it’s a service that a financial institution doesn’t offer, the consumer’s going to find it elsewhere,” Riley said. “Do you risk having that customer go to a money transfer operator, where they can get distracted by cross-sells that happen within their ecosystem? Having that as a service option embedded becomes a no-brainer.”

“From the consumers’ side, they want to conduct the business where they get paid,” said Ramakers. Getting paid within an app and having the option of global remittances can be a convenient and seamless experience for users, making it a sticky feature that encourages continued usage.

“They go in (the app) to check their balance and realize they just got paid. They then remember that they have a family member in the Philippines that they need to send some money to, so they want to send money right through the app. This process is more streamlined than signing up for another money transfer application in addition to their banking app.”

Riley hit on another aspect of embedded payments that provides valuable insights.

“When you get the social aspects of this, too, it gets fascinating because people align themselves to the components of the products they need,” he said. “Making my mortgage or rent payment is an unemotional experience, and it’s just a function of what I have to do when paying bills online.”

“But moving $500 to my mother in the Philippines, for example—that’s a need-to-have function. It improves the whole stickiness of that relationship where the household payment is a commodity item. This is a special item a person wants to do, and they’re going to be doing it for years to come.”

“It’s also important to understand the cultural needs of your users and also why cross-border payments are important,” Ramakers said in picking up that thread. “In many cases it’s about supplementing and taking care of their family incomes, the family unit, etc.”

“Although one person is living here in the U.S., the rest of their family is still in the Philippines, India, or even Latin America. They are supporting their families back home.”

Remittances often provide crucial financial support to families and can help improve their standard of living. It plays a vital role in supporting family members by providing financial assistance for basic needs such as food, housing, and healthcare. In many cases, it can also help families afford education and other investments in their future, improving their long-term prospects and economic stability.

Utilizing Cross Border Payments Data to Uncover Growth Opportunities

Analyzing cross-border payment transactions can uncover a treasure trove of opportunities. 

Many businesses lack the data necessary to see what their customers are doing when they send and receive payments.

“A lot of companies don’t realize how big the cross-border industry really is. When you start talking about 13% of people, sending money or receiving money, it’s a large number and you have to look deep into your data to be able to see that,” Ramakers said.

“It could be your ATM transactions where money is being pulled out and going to a retail location that’s out there or a POS transaction that’s occurring. It’s interesting when we’ve looked at some key companies interested in understanding what their consumers are doing.”

By utilizing cross border payments data, businesses can gain valuable insights into customer behavior and preferences across different markets, which can help identify untapped growth opportunities. Analyzing transaction data can reveal patterns and trends that businesses can leverage to develop targeted marketing strategies and tailor their products and services to meet the specific needs of customers in different regions.

“When we look with our partners at the data, we see all these transactions. It becomes very enlightening to a company when they start looking at the data and realizing what is happening and it presents some great opportunities for sure.”

That said, we want to enable banks, program managers, and corporations to keep those users in their ecosystem.

Knowing Where to Begin is a Common Challenge for Corporations

When it comes to developing an effective embedded payments solution, there is no one-size-fits-all product. Business-to-consumer (B2C) and business-to-business (B2B) transactions have their own payment nuances that need to be addressed.

“There’s a couple of things about cross-border payments that are significant,” Riley said. “First, you have two worlds. You have B2B and B2C — those different ecosystems bring some specific challenges. What you need is to have the infrastructure that makes it work seamlessly.”

“You can’t have someone try to make a payment in a foreign country and then get bogged down in slow or ineffective processing.”

“So, consider this: there’s over 200 countries in the world that have different compliance requirements. Then there’s the data that’s needed to complete those transactions. This isn’t just a simple build. For the average company, it can take up to a year to build their own solution.”

That’s why many banks, program managers, and corporations are turning to remittance and disbursement platforms to bring solutions to market for their consumers far faster than developing them in a silo. Further, platforms that collaborate and partner with the right payment networks will fuel more innovation within the cross-border-payment space.

“A good cross-border solution is difficult to create with a single partnership,” Ramakers said. “You need to integrate into multiple connection points, which is one of the things that makes it so complicated. You need to have access to bank account payments.”

“At Brightwell, we do that in over 180 different countries globally. We also have access to over 290K cash-out locations globally. And with the addition of our recent Visa partnership, that’s going to hit over 5 billion card account endpoints that lead into an account.”

“We’ve integrated into over six different providers, and on average, that’s a real drain and it’s extremely expensive from a product and development perspective. You take five to seven months to do those integrations, and that’s a hard case to build.”

“Once you start working on the integrations, you’ve got to deal with the compliance components behind it. There’s a lot of heavy regulation around making cross-border payments, and that expertise isn’t based in a lot of the companies and the financial institutions today.”

Anti-money laundering (AML) and Know Your Customer (KYC) are some of the many compliance and regulatory elements that are required to enable digital remittances to work safely and securely.

“How do you simplify that? This is one area where we’ve focused on. We’ve taken our experience and asked ourselves: How can we take what we have learned and our expertise? How can we apply that to the industry? That’s what we’re doing today with our new ReadyRemit platform.”

After years of servicing global workers and integrating with countless remittance partners, Brightwell understands the arduous process of building out a compliant and user-focused payout solution. ReadyRemit solves these challenges, making it easier than ever to enable cross-border payments.

Integrating Global Payments into Companies is More Possible Than Ever

“First, if you’re going to integrate it into your app, ease and cost are priority,” Ramakers said.

“You need to find a platform like ReadyRemit where we have that capacity and we’ve done the work for you. We are integrated into all of the best rails across the board. We have simplified the experience.”

“We’ve created APIs and SDKs where now clients can integrate the service easier and faster in 30 days or six weeks into their solution. You need to find a creative solution to that and, secondly, compliance. Remember: These are not just domestic payments.”

“We’ve learned a lot in 10 years in our experience dealing with cruise lines and global crew members. So over that period, we’ve been doing substantial cross-border payments around the world. We had our own card program and still do this today. Now we see that there is a need to enable other companies to take advantage of the kinds of expertise that we have. Most companies out there are more about building their brands. They have partial networks, and they have pieces of the program. There hasn’t been a great unification aggregation platform to bring it all together and make it simple and easy. That’s what it really comes down to,” Ramakers said.

“There isn’t one provider that can give you the fastest payments into every corridor, or the best coverage globally into a corridor. By using an aggregation and embedded platform like what we do with ReadyRemit solves a lot of those problems for you.”

The post Embedded Payments Are the Future: Is Your Business Ready? appeared first on PaymentsJournal.

Embedded payments revenue is set to exceed $59 billion worldwide by 2027, representing a growth of 84% from the $32 billion projection for 2023. These key findings from Juniper Research’s report, “Embedded Finance: Key Trends, Segment Analysis & Market Forecast 2022-2027,” highlight the rapid evolution within the embedded finance ecosystem.  

As consumers continue to gravitate towards alternative payment methods, embedded finance will gain a stronger foothold, further undermining the use of cards within the e-commerce space.  

Lots of Payment Options: Too Much of a Good Thing? 

Although having a multitude of payment options makes it convenient for consumers, there must be a balance. Sure, offering many payment methods can drive new business, but too many payment options could potentially clutter and complicate the checkout process.  

Juniper’s Research co-author Nick Maynard told FinTech Global: 

“In order to rein in the expansion of different payment options at checkout, merchants looking to enhance their checkout process must focus on the most popular and lowest-cost-to-merchant options to drive their success. Focusing on instant payments‑linked channels will lower costs significantly compared to card payments and must be considered a top priority for merchants.” 

B2B Must Get Up to Speed With Embedded Payments

The research also found that 35% of revenue from embedded payments will come from the B2B sector by 2027. While this is good news, what has been discovered is that this segment has been slow to adopt new payment methods, likely attributed to convoluted accounts receivable and payable processes.  

By utilizing embedded finance solutions, B2B businesses will be able to amplify their revenue streams. Not doing so will mean they will be losing out to competitors.  

The post Revenue from Embedded Payments to Reach $59B By 2027  appeared first on PaymentsJournal.

This brief article is posted in Forbes and written by the CEO and co-founder of Extend, a New York-based fintech that provides a digital commercial card platform that is compatible with networks and issuer bases and designed to modernize payments management. The author discusses the growth of embedded payments in peoples’ personal lives through apps and e-commerce sites (this has a much deeper adoption rate in markets across APAC) and that a similar trend is developing in B2B payments, where banks could and should be playing a more prominent role.

‘There’s been an influx in financial technology solutions geared toward businesses of all sizes: neobanks offering modern finance solutions, expense management platforms focusing on seamless integrations and financial institutions racing to compete with fintechs focused on solving niche industry challenges…

However, when it comes to further streamlining internal, back-end payment processes, why shouldn’t a finance manager have the same level of efficiency in their business tools that they do in their consumer lives? Now, that might be a bit of an exaggeration considering the complexity of managing corporate finances compared to your personal spending—but there’s certainly room for improvement.’

We cover these sorts of trends, such as embedded payments, in ongoing member research and agree that such experiences are ripe for transformation. In the U.S., the open banking adoption trend is growing as non-regulatory, market-driven demands increase for easier experiences, and that includes not only employee travel, but across CFO, treasury, and FP&A. So, the general lagging bank infrastructure capabilities for modern payment experiences need to be augmented by collaboration with more flexible and agile fintech development cycles, and that comes with embracing further cloud delivery options and API integration. Readers will see increasing examples of BaaS and PaaS models on a weekly basis, which continues to pick up steam as a necessary evolution in corporate banking.

‘For banks, the opportunity isn’t to partner with every fintech, but rather to build an ecosystem conducive to collaboration. Creating flexible APIs for clients and third parties to easily access as many of your services as possible means banks don’t have to build and market every new solution or user experience, but anyone looking to build a custom payment solution can do so with the institution. Exposing APIs might sound the compliance alarms, but this is where those strategic fintech partnerships can come into play. Look for a partner to serve as an aggregator or gateway to your services and that can mitigate your onboarding efforts and associated risk concerns…

The embedded payments industry is growing at a rapid pace, with revenues expected to grow from $43 billion in 2021 to $138 billion in 2026. As financial institutions are rethinking legacy systems and focusing on digital transformation, we’re seeing a broader range of embedded payment technologies becoming available to organizations of all sizes, opening the door for banks to offer new digital products to the small- and mid-market, as well as the enterprise.’

Overview by Steve Murphy, Director, Commercial and Enterprise Payments Advisory Service at Mercator Advisory Group

The post Embedded Payments Are Growing in the B2B Space appeared first on PaymentsJournal.

An industry colleague was bemoaning the rise of what he felt was meaningless jargon in the payments industry, and he cited the example of describing integrated payments as “embedded payments.” While I also disdain useless jargon, I felt obligated to point out that “embedded” does not mean the same thing as “integrated.” 

If you think about how we shop for good and services, first we decide what product(s) we are going to buy, and then we decide how to pay for it. When payments are “integrated,” it means that shoppers can move seamlessly from the buying process to the payments process. When payments are “embedded,” there is no separate process: the payment happens invisibly as part of the buying process.

Embedded payments are not just for online “one-click” purchases; merchants across all vertical segments are re-examining their checkout processes to look for ways to make it easier for their shoppers. Grocery is one segment where merchants are looking for new ways to better meet their customers where they are.

“For grocery leaders, payments are a key component of the customer experience,” says Derek Tanis, SVP, Consumer Partnerships at Netspend. “The transaction, however, must be threaded into that experience so that consumers don’t have to think twice about the payment itself.”

Overview by Don Apgar, Director, Merchant Services Advisory Practice at Mercator Advisory Group

The post Embedded Payments on the Rise appeared first on PaymentsJournal.

If you are not familiar with the term, “embedded payments,” it typically If you are not familiar with the term, “embedded payments,” it typically refers to financial service products that are integrated into traditionally non-financial anchor platforms such as merchant mobile apps, websites, or desktop applications. . Those seeking to embed a finance application can partner with fintechs that communicate through APIs and SDKs to deliver a financial service experience.  

According to a new report from OpenPayd, 96% of European companies surveyed said they were planning to offer embedded payments to customers in the next five years, or are seriously considering doing so, while 94% reported the same interest in an embedded banking product. Given the origination of Open Banking from PSD2 and the UK’s Open Banking Standard, it makes sense that European companies are highly interested in leveraging products that take advantage of the new regulatory environment. Embedded finance products promise a quick speed to market, flexibility, and an abundance of customizability options to customers.  

Mercator Advisory Group recently published a report on a specific embedded finance product called “Credit Card as a Service” that looks deeper into the overall credit market and how organizations are responding to rapidly changing consumer demands.

Overview by Ben Danner, Research Analyst at Mercator Advisory Group

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